Exploring Partnership Dissolution: What Are the Best Buyout Strategies for a 50-50

[Bogdan Olteanu]

Hello BiggerPockets community,

I'm here to seek your collective wisdom and expertise on a rather complex real estate dilemma. My partner and I co-own a four-unit apartment building in Alabama. We initially invested $57,000 each and then we took a cash-out refinance for 30 years, for the amount of $85,000, in which we both received equal amounts. The monthly mortgage payment comes to $392.66, with property taxes and insurance paid separately.

The estimated value of the property now is around $130,000. We find ourselves at a crossroads where one of us is considering a buyout of the partnership. Given our circumstances, we are trying to discern the best strategy for this buyout.

In general, we've identified three potential strategies:Each of these strategies seems to have its own advantages and complications. We're especially interested in learning more about the potential tax implications and any professional fees we may need to consider, such as appraisals, attorneys, or mortgage origination costs.

Has anyone here on BiggerPockets gone through a similar process of buying out a partner? What strategies did you find most successful? Were there any unforeseen obstacles you encountered?

I'd love to hear your insights, lessons learned, and any recommendations you might have for navigating a partnership dissolution.